DeepSeek-R1, a Chinese artificial intelligence app, has become the highest-rated free app on the Apple App Store in the United States, Great Britain, and China.
Its popularity has grown since its launch, refuting the widespread perception that the United States is the undisputed leader in artificial intelligence.
According to DeepSeek, the new chatbot uses cheaper chips and relies on a smaller pool of data.
The AI assistant is based on the open source DeepSeek V3 model, which, according to the researchers, was developed for less than $6 million, which is significantly less than the billions spent on similar developments by competitors. However, this claim is disputed by other AI experts.
The appearance of the R1 seems to refute the widespread bet in financial markets that artificial intelligence will drive demand across the entire supply chain, from chipmakers to data centers.
DeepSeek caused panic in the stock market. By Monday morning in Europe, futures on the Nasdaq 100 electronic stock exchange fell by 2.6%, on the S&P 500 — by 1.4% by morning in Europe; shares of the American technology company Nvidia fell by almost 10%. Shares of the AI—focused SoftBank Group fell by more than 8%, marking the largest one-day drop since September 30.
DeepSeek was founded by Liang Wenfeng, a Chinese billionaire and manager of the High-Flyer investment fund.
Deepseek is fully funded by High-Flyer and has no plans to raise funds from investors.
The company is "focused on creating fundamental technologies, not commercial applications. She has committed to providing open source code for all her models," writes the ChinaTalk portal.
American companies, including OpenAI and Google DeepMind, have pioneered the development of "Reasoning models," a relatively new field of AI research that attempts to create models that match human cognitive capabilities.
In December, OpenAI, based in San Francisco, released the full version of its o1 model, but kept the development methods secret.
The release of the DeepSeek chatbot in R1 format has sparked fierce debate in Silicon Valley about whether American companies developing artificial intelligence, including Meta and Anthropic, will be able to protect their technical advantage.
Singapore-based technology equity consultant Wei-Sern Ling told the BBC that the Chinese AI assistant could "potentially undermine the investment case for the entire AI supply chain."
However, Wall Street banking giant Citi warned that while DeepSeek could challenge the dominant positions of American companies such as OpenAI, the challenges faced by Chinese firms could hinder their development.
"According to our estimates, in the face of inevitable restrictions, US access to more advanced chips can be considered an advantage," the analysts said in a report.
